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Commercial Real Estate
Business Observer Thursday, Jan. 27, 2022 3 months ago

$200 million Bath & Racquet project seeks to gain momentum — quickly

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Developers hope to capitalize on persistently hot market.
by: Mark Gordon Managing Editor

In tennis terms, for a while it looked like real estate investor and developer Mark Lucas might double fault on his plans to redevelop the Sarasota Bath & Racquet Club.

But with some shifty footwork, agile and creative real estate brokers  — and the assistance of a smashing hot real estate market — Lucas turned the project into a major advantage. The endgame? The Bath & Racquet Club, a prominent part of Sarasota for more than two generations that had recently been in decline, is about to get what could be a $200 million makeover.

The convoluted project is essentially three sets: The first set began several years ago, when former Bath & Racquet owner Scott Olson attempted to redevelop the site. The Olson family owned the facility, behind a Trader Joe’s on a busy part of U.S. 41, about five miles south of downtown Sarasota, for 50 years. Despite meeting with neighborhood groups at least seven times and spending millions on plan revisions, the initial proposal for a comprehensive amendment revision was denied. The Sarasota City Commission rejected the proposal in February 2020.

Set two stars Lucas. A Toronto native, he’s worked on several projects in Canada, including a mall, residential communities and the first Whole Foods in The Great White North. Lucas worked on projects in California as well, before moving to Sarasota in 2010, where he’s since developed an assisted living facility and some residential communities, among other projects. Lucas went under contract for the club in early 2017 and bought it from Olson in May 2020 for $5.5 million.

Lucas and his team went through multiple plan adjustments, before, finally, receiving city approval this past November. At 277 residential units and 45,000 square feet of commercial/retail space, the approved plan includes more residential and less commercial than previous iterations. One feature that will remain the same: the iconic bath and racquet component will be renovated, not demolished.

Courtesy. Fabio Di Prima

Now to set three: Lucas sold the 13-acre site for $15.35 million — nearly threefold what he acquired it for only 20 months ago. The new owners, under Sarasota Springs LLC, are a joint venture between Federal Finance Group, which has offices in New York and London and Silver Sky Global Capital. The latter, a private equity firm with offices in London and New York, was co-founded by Fabio Di Prima, who has been in real estate development for at least a decade. He also worked in mergers and acquisitions, where he led the post-acquisition restructuring process between Fiat and Chrysler Group, a $14 billion deal.

Courtesy/ Halflants + Pichette renderings. The planned redevelopment project for the Bath & Racquet Club in Sarasota includes 277 residential units and 45,000 square feet of commercial/retail space.

A native of Italy, Di Prima, 39, who now lives in Manhattan, says both Sarasota’s growing profile nationally and the specific location of the site drew him to the project. He hopes construction could begin by the end of 2022, if all the permits are in place. “I look at deals that can be a little different, and there’s a lot of potential here,” he says. “It’s an exciting project and we are working full-speed ahead.”  

While Di Prima looks ahead, Lucas, reflecting back, says city officials were actually “fabulous to work with,” despite the arduous process. It was the neighborhood groups that made the project such a grind, as he says he and his team, and Olson before him, constantly listened and adjusted. (Neighbors' chief complaint was having too much residential in a 13.4-acre property, a concern rebuffed by both project architect Michael Halflants and, ultimately, city officials.) “What truly made this so difficult was the goalposts kept changing,” Lucas says. “And every time something came up it took six months to get to the city commission.”

Courtesy/ Halflants + Pichette renderings. Work on the redevelopment project for the Bath & Racquet Club in Sarasota could begin later this year.

In the meantime, Lucas spent more than $2 million to keep the Bath & Racquet Club going. That ranges from new air conditioners to pool pumps to a roof. And it includes $40,000-$50,000 a month in carrying costs. Doing all this during the pandemic, of course, didn’t help. Lucas says his original lenders for buying the property from Olson “ran away” in spring 2020. He instead found alternative financing through his network in Canada.

Lucas initially intended to redevelop the club on his own, doing it in phases, where it would cost between $50 and $75 million. Doing it all at once, part of the city approval, is going to cost four times as much, approaching $200 million. “This was meant for a big company that has the horsepower to do this,” Lucas says.

'What truly made this so difficult was the goalposts kept changing. And every time something came up it took six months to get to the city commission.’ Mark Lucas

Two aces of the project, Lucas adds, are the brokers who connected the pieces: Kevin Robbins and Mitch Helmuth of Sarasota’s Harry E. Robbins Associates. The pair created a sense of urgency for the project, with a call for offers that had a 30-day deadline. That helped separate tire-kickers from serious possible buyers, says Robbins — a Sarasota native who grew up less than a mile from the property. He even attended tennis and swim camps there as a kid.

Offers came pouring in, from California to New York and Texas to Montana, says Robbins — a credit not only to the site and location, but the show-no-signs-of-slowing-down market. Some offers, such as one from a well-known national homebuilder, sought to demolish the gym property. Lucas passed on those. The Di Prima-led team won the day for vision and capital to carry out the project.

As for Lucas, who calls the project one of the most difficult, yet rewarding, experiences of his 35-year career, he’s ready to get back in the game. “I’m a deal junkie,” he says. “I want more deals.”

 

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